NYISO considers market relief to encourage renewable energy

The New York Independent Service Operator (NYISO) claims it would "support in principle" future exemptions for renewable energy generation in buyer-side mitigation efforts to control new energy generation. It's an example of how renewable energy is paying closer attention to wholesale power markets in several key states.

This summer the Federal Energy Regulatory Commission (FERC) gave its nod to NYISO's buyer-side mitigation measures for New York City, which do not include mitigation tests or exemptions for renewable energy or "special case resources" (i.e., demand response).

However FERC asked NYISO to rethink whether their mitigation rules could be adjusted for renewable energy in new capacity zones (NCZ), which NYISO initially declined to do.

The idea is to achieve a balance in power generation assets, investing in those that are economically viable and avoiding overinvestment — but at the same time not being so heavy-handed to keep prices artificially low and discourage necessary new generation, either. PJM currently has such an exemption for wind and solar energy, but New England ISO does not.

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In its response filed late last week, NYISO acknowledged that the buyer-side mitigation rules in place for NYC could be adjusted for NCZs, though it strongly believes in keeping the rules consistent and currently it sees no reason to treat them any differently. However, NYISO did say that it agrees with some of its stakeholders that there "are valid reasons for developing a renewable exemption" for all NCZs, and especially in the downstate G-J capacity zone from the Hudson Valley down to NYC. "NYISO is open in principle to the development of an exemption for renewable resources from buyer-side mitigation in all NCZs," NYISO states.

There's a lot of wiggle room in that back-and-forth rhetoric, and NYISO noncommittally says it will further pursue the matter with its stakeholders "if the Commission were to direct it to do so." Still, what's important is that NYISO is keeping the conversation open for future support of renewable energy.

"They've truly left the door open," said Carrie Cullen Hitt, senior vice president of state affairs for the Solar Energy Industries Association (SEIA). Renewable energy groups need to become more involved in grid operators' conversations about their wholesale power markets, not just in fledgling markets like New York or Texas, she pointed out, but also in California where they're still figuring out how to replace the 2.2-GW of generation from the shuttered San Onofre Nuclear Generation Station (SONGS), plus replace or retire another 12 GW of gas-fired generation.

"This is an area that's been on our radar increasingly," Hitt said. "These issues are starting to pop up; they're going to matter."